The regulatory regime currently contemplated in government-sponsored enterprise reform legislation in the Senate doesn’t go far enough, according to officials at the Federal Housing Finance Agency and others. At a hearing this week by the Senate Committee on Banking, Housing and Urban Affairs, Alfred Pollard, general counsel at the FHFA, testified that the regulatory functions included in GSE reform legislation from Sens. Bob Corker, R-TN, and Mark Warner, D-VA, should be enhanced. “Making regulatory authority clear and explicit, including where appropriate the ability to establish prudential standards, set capital requirements and take enforcement actions, would enhance...

In just a matter of days, JPMorgan Chase agreed to two separate settlements totaling $17.5 billion to resolve federal and state civil claims as well as representation and warranty and servicing claims involving residential MBS. On Nov. 19, the Department of Justice, along with other federal and state agencies, announced a $13 billion settlement with JPMorgan, which acknowledged making misrepresentations about billions of dollars in MBS sold to investors prior to Jan. 1, 2009. The settlement is said to be the largest combination of damages and civil fines for a single entity in U.S. history. Most of the damage was inflicted...

The Securities and Exchange Commission is preparing to take more cases to trial in lieu of settling, according to Mary Jo White, chair of the SEC, who prompted a change in the agency’s protocol for settling cases with no admission or denial of guilt. “In this age of diminishing trials, we at the SEC may be about to reverse the trend a bit,” White said in a speech late last week. Shortly after White took over as chair of the SEC, she said...

Some 33 mortgage lenders contributed loans to the new jumbo MBS led by Guaranteed Rate with a 9.3 percent share.

Nancy Handal, managing director of insurance conglomerate MetLife, oversees a $70 billion fixed-income portfolio and a $6 billion “high-yield” residential MBS opportunity fund – but has bought into just one jumbo MBS deal over the past few years. And she’s not shy about the reasons why: it’s all about disclosures. Handal is not happy about what non-agency issuers disclose and in particular she’s dismayed that MBS investors are essentially frozen out of the due-diligence process. Speaking at a housing forum sponsored by the Urban Institute and CoreLogic this week, the MetLife executive expressed...

Commercial banks continued to see their investment in residential MBS slowly evaporate during the third quarter of 2013 even though the overall market appears to finally be growing again. A new Inside MBS & ABS analysis of recently-released call report data shows that commercial banks and thrifts held a combined $1.513 trillion of residential MBS as of the end of September. That was down 1.0 percent from the end of June and represented the lowest level since the middle of 2011. Depositories and other private MBS investors have...[Includes two data charts]

According to an analysis from Inside MBS & ABS, barring a sudden, unexpected shift in strategy, the Fed by the end of this year will exceed the total MBS holdings of commercial banks and thrifts.

With refinance volume falling and minimum net-worth requirements heading north, advisors in the mergers-and-acquisitions market say undercapitalized firms should sell now, while they still can. Larry Charbonneau, a principal of Charbonneau & Associates of Texas, said he is currently working on four deals but noted that, “There a lot of shops out there with less than $5 million in capital that need to do something but haven’t realized it yet.” Although Fannie Mae and Freddie Mac have net-worth minimums in the $3 million range, there is...

Jumbo mortgages have a higher risk of fraud than conforming mortgages, according to a new report from Interthinx.

Current homeowners have increasingly purchased homes with cash in lieu of a mortgage in recent months, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Analysts suggest that the trend is driven by frustrations with the mortgage process and seasonal factors. Some 28.6 percent of home purchases completed in October relied solely on cash for financing, based on the three-month moving average. That was the second consecutive monthly increase in the cash-financing share, after it fell to 26.8 percent in August. While investors predominantly use cash to purchase homes, homeowners tend...